aBUJA — The Finance Minister, Mrs Zainab Ahmed, said yesterday that payment of the $9billion judgement debt imposed on Nigeria by a UK court would seriously affect the economy and cause Nigerians untold hardship. Zainab Ahmed This is even as the Federal Government has raised a high-powered investigation panel to probe the entire process that led to the award of the multi-million Gas Supply Processing contract that necessitated the judgement to P&ID firm.
Speaking at a media briefing she jointly addressed with Information Minister, Alhaji Lai Mohammed, Attorney-General of the Federation & Minister of Justice, Abubakar Malami, and Governor of the Central Bank of Nigeria, CBN, Godwin Emefiele, Mrs Ahmed said: Paying this fine will seriously affect the economy and inflict more pains on the people. “We however take consolation in the fact that the Nigerian government is making serious effort to get the judgment set aside because the implications would be too tough on all Nigerians.”
Meanwhile, the Federal Government has raised a high-powered joint investigation panel to probe the entire process leading to the award and the failure of the contract. In particular, the probe is to unravel how and why the agreement sealed between government and a foreign firm, Process and Industrial Development Limited, P&ID, in 2010, failed and the roles played by the local and international parties in the failed project.
The joint probe, to be conducted by the trio of the Economic and Financial Crimes Commission, EFCC, the National Intelligence Agency, NIA, and the Inspector-General of Police, IGP, will establish the identity of the company, the personalities behind it and the circumstances surrounding the agreement between it and Nigeria’s Ministry of Petroleum Resources and possible criminal prosecution of the masterminds of the failed project, which is now causing the country international slur.
Minister of Information, Alhaji Lai Mohammed, who announced the decision of government at the media conference, lamented that based on the failed contract, which was for a 20-year gas supply, the foreign company filed for compensation in both the United States and the United Kingdom against Nigeria. According to him, this resulted in last week’s granting of $9.6 billion award to the company, a development that now stings Nigeria.
- FG WORRIED
The minister said the Federal Government was concerned about the whole episode, saying it looked like a deliberate attempt by some elements to make a quick fortune from Nigeria, a development, which the government was determined to unravel.
He said: “We want to place on record that the Federal Government views with serious concerns the underhand manner the contract was negotiated and signed. “Indications are that the whole process was carried out by some vested interests in the past administration, which apparently colluded with their local and international conspirators to inflict grave economic injury on Nigeria and its people.
“In view of the above, and in an attempt to unravel the circumstances surrounding the entire transaction, the Attorney-General of the Federation, with the approval of Mr President, has requested the Economic and Financial Crimes Commission, EFCC, the National Intelligence Agency, NIA, and the Inspector General of Police, IGP, to conduct a thorough investigation into the company, the circumstances surrounding the agreement and the subsequent event, which includes commencing a full-scale criminal investigation.”
- NIGERIA CAN’T COUGH OUT $9B
The minister also made it clear that Nigeria was not in the mood to cough out the huge amount and was not also panicky about losing any of its assets to the P&ID Limited.
“Gentlemen of the press, despite the recent recognition of the award by a UK court, and contrary to some reports, Nigeria is not about to lose any of its assets to P&ID. There is no imminent threat to Nigeria’s assets!l “In the first instance, the enforcement of the award cannot even commence now because the Judge in the UK court ordered that the P&ID cannot enforce the judgment against Nigeria until after the court resumes from its current vacation.
“What this means is that enforcement action cannot begin until further hearing on the matter, which will take place on a date to be determined by the court upon its resumption. “The Federal Government, therefore, wishes to use this opportunity to assure Nigerians that there is no immediate threat to Nigeria’s assets as has been wrongly interpreted by a section of the media.
“Nigerians should be assured that the Federal Government is taking all necessary steps to appeal the decision of the UK court, to seek for a stay of execution of the decision, to defend its rights and protect the assets of the people of the Federal Republic of Nigeria,” the minister boasted.
- PROJECT DESIGNED TO FAIL — Malami
On his part, Justice Minister, Abubakar Malami, SAN, said the government was convinced the entire project was scuttled by the local and international conspirators to make quick gains.
The AGF said it was curious the parties designated the Ministry of Petroleum as the supplier of gas to the foreign company without the involvement of International Oil Companies, IOCs, and the , when it was obvious that the ministry does not produce or supply anything.
Also speaking at the briefing, CBN governor, Godwin Emefiele, said the name of the company, Process and Industrial Development Limited, was not found in any of its books as having brought in any tool or equipment to Nigeria for the purpose of investing or establishing any project or programme. “We have gone through our records and there is no trace of any equipment or machine that the company had ever come to establish in Nigeria, despite claiming to have invested over $40 billion,” the CBN governor said.
- BACKGROUND TO THE CONTROVERSIAL GAS SUPPLY PROCESSING AGREEMENT, GSPA
In 2010, the Federal Ministry of Petroleum Resources and P&ID entered into a Gas Supply Processing Agreement to last for 20 years but there is no record anywhere that the company performed any project anywhere in the country in pursuit of the contract. With the contract suffering some setbacks, the case went to arbitration. P&ID’s claim in the arbitration proceedings was mainly for the loss of profit for the 20-year term of the GSPA. In an interim award, the Arbitration Tribunal ruled that Nigeria has breached the contract.
Though Nigeria successfully applied to have that award set aside by the Federal High Court in Lagos, the tribunal ignored the decision. Consequently, on January 31, 2017, the tribunal rendered its final award against the Ministry of Petroleum Resources in the sum of $6.597billion, together with pre-award interest at the rate of 7% per annum, effective from March 20, 2013 and post-award interest at the same rate from the date of the award. This interest increased the size of the award to US$9.6 billion.
- WHAT NIGERIA DID AFTER THE ARBITRATION AWARD
After the arbitration award in 2017, Nigeria made several attempts to negotiate the award and resolve the whole issue amicably with P&ID but to no avail, which eventually led to the enforcement proceedings instituted, simultaneously, by the company in the UK and the US. The Federal Government then engaged the services of the US law firm of Curtis, Mallet-Prevost, Colt & Mosle LLP, which took steps to defend the proceedings in the US District Court of Columbia to dismiss P&ID’s application for the enforcement of the award on the grounds that Nigeria, as a foreign state, has an absolute right to obtain an authoritative determination of its sovereign immunity.
While Nigeria has recorded some successes in that case in the US, the proceedings are currently on-going in the US and the Federal Government will ensure that its interest and that of the people of Nigeria are vigorously defended.
It is worth mentioning that in challenging the award, the Federal Government relied upon an expert report which analyzed the damages given to the P&ID. The expert concluded that the damages were clearly unreasonable and manifestly excessive and exorbitant; that they went far beyond any legitimate protection of the commercial interest of the P&ID; that they were completely wrong and obviously unjustifiable; and that the damages overcompensated P&ID on a frankly gargantuan scale and imposed a punitive award on Nigeria.